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European Employment Strategy

The European Employment Strategy (EES) is a ‘soft’ law mechanism designed to coordinate the employment policies of the EU Member States. While the objectives, priorities and targets are agreed at EU level, the national governments are fully responsible for formulating and implementing the necessary policies.

Historical background

The Delors White Paper of 1993 on ‘Growth, competitiveness, employment: the challenges and ways forward into the 21st century’ declared that ‘employment was one of the most important areas of concern of the EC’ and proposed ‘a thorough-going reform of the labour market’. The European Council of 9–10 December 1994 in Essen confirmed the EU’s commitment to the promotion of employment and agreed on five key objectives:

  • the development of resources through vocational training;
  • the promotion of productive investment through moderate wage policies;
  • the improvement of the efficiency of labour market institutions;
  • the identification of new sources of jobs through local initiatives;
  • the promotion of access to the world of work for specific target groups (young people, long-term unemployed, women).

These objectives became known as the ‘Essen Strategy’ – a strategy of coordination of national employment policies aimed at achieving the specified objectives. The insertion of a new employment title into the EC Treaty (Articles 125–130 EC/now Articles 145-150 TFEU), by the Treaty of Amsterdam, institutionalised the EES. This step enshrined in the Treaty the Luxembourg process (called after the Luxembourg ‘Jobs summit’ of 1997). Article 148 TFEU provides for the Council and Commission to draw up annual guidelines, which the Member States ‘shall take into account in their employment policies’, on the basis of which they are to make an annual report. The Council and Commission may make (non-binding) recommendations to Member States concerning their employment policies. In 2000, the mid-term review of the Luxembourg process concluded that a common, integrated framework for structural change was helping to promote a mutually supportive synergy effect between different actors at European and national levels.

The implementation of the EES through the Luxembourg process of the open method of coordination (OMC) has various strengths: it is an iterative process, carried out in a pluri-annual perspective, with a set of guidelines including targets and deadlines, as well as a review and evaluation procedure, which impacts on national administrations. It is underpinned by five key factors: subsidiarity, convergence, mutual learning, integrated approach and management by objectives.

In 2000, the Lisbon Presidency Conclusions called on the social partners to play a role in the implementation of the EES. This was reinforced at the Feira Council in 2000, which invited the social partners ‘to play a more prominent role in implementing and monitoring the guidelines’. Guidelines could emerge from an EU-level social dialogue between the European social partners with mandates from affiliated social partners drawing on experience of national employment pacts or following on from proposals by the Commission. Affiliated social partners at Member State level could produce National Action Plans to implement the guidelines embodied in EU framework agreements.

The Commission has invested a large amount of both time and resources in the development of the EES (including a major impact evaluation in 2002). The EES has resulted in annual sets of employment guidelines, the Member States have undertaken National Reform Programmes (previously National Action Plans) on an annual basis, annual joint employment reports have been produced, and recommendations have emerged following the coming into force of the Amsterdam Treaty on 1 May 1999. The annual employment guidelines consistently posited four pillars: adaptability, entrepreneurship, equal opportunities and employability. Since the 2003 guidelines, the four pillars have been replaced by three main objectives: full employment, improving quality and productivity at work, and strengthening social cohesion and inclusion – in the face of increased regional disparities after the enlargement of the EU, the last item was changed into ‘strengthening social and territorial cohesion' in the 2005–2008 employment guidelines. The National Reform Programmes were based on a new set of 24 Integrated Guidelines for Growth and Jobs Policy 2005–2008 and aimed to show how the guidelines were put into practice at the national level. They had to set out the policy responses to the key macroeconomic, microeconomic and employment policy priorities in one document. The NRPs also drew on a number of OMC processes. The involvement of the social partners was seen as essential to achieving the objectives.

Recent EES developments

The enlargement process of the EU to 25 Member States in 2004 (and to 27 in 2007) has proved one of the major challenges for the EES during the last few years. The preparation for full membership of the EES via Joint Action Plans proved to be a helpful instrument to ensure a smooth integration of the new Member States. Candidate countries had the opportunity to adjust their institutions and policies to the European Employment Strategy, thus allowing the full implementation of the Employment Title of the Treaty from accession.

The EES has also proved to be an important policy instrument as an integral part of the Lisbon strategy. Following Wim Kok’s sombre review of the Lisbon strategy in 2005, the Commission was further forced to reconfirm its support for the EES and announce the need to implement measures to improve the synergy effect between EU and the national action plans. The re-launching of the Lisbon strategy saw the European Council approve changes to EU guidelines which would affect the EES. In particular, this concerned the integration of macro-economic, micro-economic and employment policies for growth and jobs – producing one set of guidelines to cover all three areas. A further step undertaken to reinvigorate the EES involved the unveiling of the 2007–2013 cohesion policy in 2006. The main feature of this new policy involves the importance placed on encouraging Member States to submit National Strategic Reference Frameworks that promote growth and better jobs. These new developments address previous concerns that the EES was being undermined by its uncertain relation to macroeconomic policy and the scarcity of financial support for innovative developments.

In 2005, the Commission launched a new programme of Mutual Learning centred on the exchange of good practice and the dissemination of the experiences with the EES. In parallel, the Commission adopted a Community Lisbon Programme with around 100 EU-level measures in July 2005. In January 2006, the Commission presented the first annual progress report in line with the revised Lisbon Strategy.

In 2007, the original Employment Incentive Measures (EIM) which were part of the employment title of the Treaty of Amsterdam were reorganised and, together with other initiatives, regrouped under the Community Programme for Employment and Social Solidarity (PROGRESS). The programme is based now on four specific Community Action Programmes which finance the implementation of the Social Policy Agenda as well as policies in relation to employment and working conditions.

The present proposal for the new employment guidelines (2008-2010) is influenced by recent discussions on employability and flexicurity, and emphasises three priority areas:

  • attracting and retaining more people in employment, increasing labour supply and modernising social protection systems;
  • improving adaptability of workers and enterprises;
  • increasing investment in human capital through better education and skills.

See also: employment rate; European social dialogue; European social model; National Action Plans; National Reform Programmes; open method of coordination; peer review; subsidiarity.

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.
Page last updated: 03 December, 2010